Supreme Court to decide whether Omnicare made illegal false statements to investors about nursing home kickbacks

The U.S. Supreme Court will hear a case alleging that the nation's largest long-term care pharmacy, Omnicare, broke the law by keeping potential investors in the dark about kickbacks to nursing homes, the high court announced Monday.

At issue is a Securities and Exchange Commission statement that Omnicare issued prior to a stock offering in 2005, which said that all the company's contracts were legal. The long-term care pharmacy has since entered into several legal settlements over false claims and kickbacks charges.

A group of investors that bought stock in the 2005 offering sued Omnicare, contending that the SEC statement was false and misleading given the activities that subsequently have been alleged. A district court dismissed the action on the grounds that Omnicare had not knowingly made false statements in the SEC filing. An appeals court reversed that decision, saying that the case should go forward if Omnicare made untrue statements, even if the company believed at the time the statements were true.

The case is expected to go before the Supreme Court in its next term, which begins in October.